Stocks fall, bond yields rise on strong CPI; corporate earnings mixed.

From Nasdaq: 2025-02-12 15:50:17

Stock indexes are down today, with the S&P 500 and Dow Jones falling to 1-week lows due to surging bond yields after US Jan consumer prices rose more than expected. Jan CPI accelerated to +3.0% y/y, and corporate earnings results are mixed. The markets are discounting a 2% chance of a rate cut at the next FOMC meeting.

US MBA mortgage applications rose +2.3% in the week ended February 7, with the purchase mortgage sub-index down -2.3% and the refinancing mortgage sub-index up +9.6%. Overseas stock markets are mixed, with Euro Stoxx 50 down -0.15% and China’s Shanghai Composite Index up +0.85%. Interest rates are higher, with 10-year T-notes down -24 ticks.

Italy’s Dec industrial production fell -3.1% m/m, and ECB member Holzmann said cutting interest rates by 50 bp is not a good decision due to inflation risks. Swaps predict a 100% chance of a -25 bp rate cut by the ECB. US stock movers include Westinghouse Air Brake and Waters down more than -7%, while CVS Health and Gilead Sciences are up more than +7%.

Earnings season continues with companies reporting Q4 results. According to Bloomberg, 77.6% of S&P 500 companies have beaten earnings estimates. Notable movers include Super Micro Computer up more than +6% and Teradata down more than -18%. Tesla is up more than +2% after receiving a buy recommendation from Benchmark. Inflation expectations are bearish for T-notes, with the 10-year breakeven inflation rate hitting a 23-month high.



Read more at Nasdaq: Stocks Sink and Bond Yields Spike on Strong CPI